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Bitcoin Rebound: BTC Hits $40K Again After Short Decline

You can find information about the reasons behind the Bitcoin rebound in this article.

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Bitcoin Rebound: BTC Hits $40K Again After Short Decline

Crypto News – After dropping by about 20% from its peak of $49,000 earlier in the month, Bitcoin rose again overnight. It is predicted by specialists that two factors will propel the cryptocurrency’s comeback.

Bitcoin Rebound: BTC Hits $40K Again After Short Decline

According to Noelle Acheson, the former head of research at Genesis and the author of the “Crypto is Macro Now” newsletter, the recent decline in price is most likely temporary because more savings are being directed toward “hedge” assets due to geopolitical tension and ETF purchases as GBTC exits become less common.

It’s happened often before, and given the tailwinds — ETFs, halving, currency turmoil — the market is likely to recover, especially as dip-buyers step in,

Acheson

What Caused the Bitcoin Price to Fall?

The “long-term bull market trend has not been broken,” according to Chris Kuiper, director of research at Fidelity Digital Assets, despite the recent sell-off and downward price trend. Just one week before ETFs were permitted and Bitcoin started to decline, Kuiper issued a warning that volatility could surge.

Furthermore, nothing in the core Bitcoin investment thesis has been invalidated,

Kuiper

According to JPMorgan, Grayscale’s GBTC fund has experienced withdrawals of around $4 billion since it changed to an ETF, which has dragged down the price of Bitcoin. Investors, including insolvent companies like FTX and BlockFi, had been tied into GBTC for years. According to JPMorgan, the switch to an ETF provided a release valve for companies that required liquidity and probably accounts for part of the current selling pressure.

Bitcoin’s price has been negatively impacted by the selloff in GBTC, but there were other factors at play as well, such as the shifting macroeconomic picture. The US Federal Reserve issued multiple dovish signals in December, which markets interpreted as an impending reduction in interest rates. As a result, the price of Bitcoin increased.

However, due to hawkish remarks made by central bankers, the market now projects a 50% chance of an interest rate cut in March, down from a 75% chance just a month ago. As investors take on greater risk in search of returns, lower interest rates help riskier assets like Bitcoin.

Bitcoin Rebound: BTC Hits $40K Again After Short Decline
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lectertodd

Lectertodd is 25 years old. She graduated from Çankaya University, Department of Psychology, in 2021. She actively works as a writer, translator, and editor for various websites. Moreover, she loves reading, researching, and learning new things.

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